3M Co MMM

Wide-moat rated 3M had a very solid 2020 fourth quarter, with nearly of all its business divisions pacing slightly ahead of our near-term top-line expectations. This dynamic also made its way down to 3M’s segment operating profit line. 3M produced fourth-quarter revenue of $8.6 billion (against our expectations of $8.2 billion) and segment operating income of $2.1 billion (against our $2.0 billion expectations). Despite near-term outperformance, 3M’s 2021 guide is somewhat muted, in our view, though these effects largely canceled themselves out in our projections. However, we are raising our fair value estimate by $1 to $187 from $186 previously to account for time value of money, even as our long-term expectations remain relatively unchanged.